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McKesson (MCK) Set to Sell Canadian Rexall Pharmacy Group

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McKesson Corporation (MCK - Free Report) recently announced its plan to sell Rexall Pharmacy Group, the Canadian drugstore chain that the company bought for about $2.2 billion seven years ago.

McKesson bought the business in 2016 from Katz Group to solidify its position in Canada's pharmaceutical supply chain.

Price Performance

For the past six months, MCK’s shares have rallied 19.9% against the industry’s decline of 2.4%. The S&P 500 increased 3.9% in the same time frame.

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More on the News

McKesson has been communicating with potential buyers of Rexall throughout the summer. The business is currently in the midst of its second round of offers, with no set deadline for submissions.

Rexall operates 400 pharmacies across Canada and employs 8,000 people. The pharmaceutical distribution division of Rexall, which some prospective buyers are interested in, might not be included in a sale.

According to Dealogic data, pharmaceutical dealmaking in Canada increased to $6.8 billion in 2023 from $1.8 billion in 2022 but down from $7.5 billion in 2021.

In 2021, McKesson sold off its European businesses in France, Italy, Ireland, Portugal, Belgium, and Slovenia, along with its German-based AG headquarters in Stuttgart to Phoenix Group, a German drug distributor.

Notable Developments

In December 2023, McKesson announced the availability of an FDA-approved drug for PNH treatment. The availability of the drug is expected to significantly solidify McKesson’s foothold in the global PNH treatment space and boost its Specialty Pharmacy Solutions business.

Zacks Rank & Other Stocks to Consider

McKesson carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Acadia Healthcare (ACHC - Free Report) , and Universal Health Services (UHS - Free Report) .

Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.

Acadia Healthcare, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.4%. ACHC’s long-term earnings are expected to grow at 11.2%.

Acadia’s shares have gained 11.7% in the past six months against the industry’s decline of 5%.

Universal Health Services, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%.

UHS’s shares have gained 1.9% in the past six months against the industry’s 5% decline.

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